Potential policy decisions affecting revenue
ACC - Funding Policy Review (New, Unquantified)
The Government is undertaking a review of ACC's funding policy. Adopting a lower funding target band midpoint would result in a reduction in levies and reduce Crown revenue and Crown assets, with a flow-on impact to the operating balance before gains and losses (OBEGAL).
ACC - Levies (Unchanged, Unquantified)
Levy rates for the Work, Earners' and Motor Vehicle accounts are set by Cabinet following a public consultation process. As at 26 November 2012, the Government has indicated that it is unlikely to agree to further reductions in ACC levy rates for the 2013/14 year as recommended by the ACC Board so the forecasts assume the current 2012/13 levy rates. Claims experience, ACC performance and economic assumptions (particularly discount rates) can impact insurance expenditure, both in the current year and the estimated future liability. If any of these factors differ from what is forecast the revenue collected may be more or less than required to cover the costs of claims, resulting in unplanned savings or costs which could have a corresponding impact on future years' levy rates.
Revenue - Income-sharing Tax Credits (Unchanged, Quantified)
The Government has introduced legislation to establish an income-sharing tax credit. If passed as introduced, the legislation will allow couples with children under the age of 18 to pool their earnings for income tax purposes if they meet certain criteria. If implemented, the changes will reduce tax revenues by $500 million per annum once the scheme is fully operational. The Finance and Expenditure Committee has recommended that the significant fiscal cost of the package be addressed before the Bill proceeds further.
Services Funded by Third Party Revenue (Unchanged, Unquantified)
A wide range of government services are funded through third party fees and charges. Demand for these services can vary which has a direct effect on revenue received. There is a risk the Government may need to provide additional funding if revenue collected is lower than the total costs of providing the service. There is also a risk that changes will be required to the way government services are delivered, which could result in costs to the Crown.
